Question

A car produced by the Japanese company Honda in a plant located in Ohio would be included in:

A) U.S. GDP but not U.S. GNP.
B) U.S. GNP but not U.S. GDP.
C) Both U.S. GDP and U.S. GNP.
D) Neither U.S. GDP nor U.S. GNP.

Answer 1

The car produced by Honda in Ohio would be included in U.S. GDP but not U.S. GNP.

Step-by-step explanation:

The car produced by the Japanese company Honda in a plant located in Ohio would be included in option A) U.S. GDP but not U.S. GNP.

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders. Since the car is produced within the United States, it contributes to the country's GDP.

On the other hand, Gross National Product (GNP) includes both domestic production and income earned by domestic citizens and firms abroad. While Honda is a Japanese company, the production of the car in the United States does not count towards the country's GNP.